Trump asks the Fed to cut interest rates by 1% and calls for more quantitative easing

President Donald Trump, in his most brutal attack on the Federal Reserve, on Tuesday called on the central bank to cut interest rates by 1 percentage point and to implement more quantitative easing measures printing money.

In a two-part tweet, the president has unfavorably compared the Fed to his Chinese counterpart and said that if US monetary policy was eased, the economy would "move up a gear."

In the past, White House officials, including Trump and senior economic adviser Larry Kudlow, have urged the Fed to cut rates by half a point. Tweets have literally doubled on this approach.

The Fed is currently targeting its benchmark interest rate in the range of 2.25% to 2.5%. The rate has been multiplied by nine since December 2015, even though it indicated in March that it would probably be with increases for the remainder of 2019, while it was forecasting two more at the end of the year. 39, last year.

Following the order of the President, the federal funds rate would be restored to its December 2017 level.

The rate cut promises to be feverish despite another strong economic performance in the first quarter. GDP rose 3.2% after many economists had predicted little, if any, growth before the release.

Growth has come with little inflation. The preferred indicator by the Fed has shown a gain of only 1.6% over the past year, excluding price of food and energy.

This lack of inflation is why Kudlow and others believe the Fed can reduce risk-free rates. Central banks normally tighten their policy to control prices as the economy grows.

While it is not unusual for presidents to criticize monetary policy, this has always been done quietly, making Trump's public convictions against President Jerome Powell and his atypical colleagues.

With several calls for rate cuts, it is Trump 's second application for further quantitative easing.

The Fed has put in place three phases of easing during and after the financial crisis with the aim of lowering long-term rates and encouraging the influx of money into risky assets. such as stocks and corporate bonds. There is nothing to indicate that the Fed is considering a new round of quantitative easing, although economists at the St. Louis Fed have launched the idea of ​​a buyback mechanism that, according to some economists, would act as a form of easing.